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(VOLUME) MFI (Market Facilitation Index) <Summary>

08-29-2016, 04:40 PM

Here is the summary of what the MFI does and how it operates. I have written two previous short posts on this topic and this is the thrid of the series. You can find the first two in the following links:

*The Market Facilitation Index (MFI) is a forex indicator that measures the weakness or strength behind current any movements in the price of an asset.

*MFI also help in determining when a noticed trend is strong enough for you to trade, when a fresh trend will commence and what times to avoid trading.

*MFI basically is able to do this by studying the relationship between the changes in trading volume and that of the size of price moves.

*MFI uses different colored bars in delivering its trade signals.

* The Green colored bar indicates growing price moves and high trading volume, which means that as more trader flood the market, price moves are strengthnen up. This may suggest it is okay to trade in the direction of te present moves.

*The Brown colored (fade) bar is noticed when the trading volumes are down and price movement is shrinking, which means most traders are no more interested in the current price movement and it may end at anytime. This may suggest it is best to avoid entering trades in the same direction of the current moves.

*The Blue colored bar is noticed when volume is down and price moves are seen to be growing, which means the strong moves are observed as a result of low volume and will not last for long. This suggests that trading new entries should be avoided.

*The Pink colored (squat) bars indicates shrinking price moves and high volume, which means the heavy battle between the top player is likely to trigger a massive move once a winner emerges from the trade. It suggests a massive price move is on the way but doesn't determine its direction.

*Market Facilitation Index indicator works with any time-frame and every market conditions.